The start of the driving season
This Monday’s public holiday in the US (Memorial Day) marked the beginning of the summer driving season in the US. Demand has been in structural decline since it peaked in 2007 and the recent levels have been disappointing. After a surge in February, demand has been generally flat over the past three months, leaving the 4-week average about 200 kbpd (2.1%) below last year. The steep rise in retail gasoline prices between mid-February and mid-May (+26%) to just under the record high of $4/gal is certainly deterring some drivers. That is clearly visible in the latest (March) figures for vehicle miles travelled, which show negative yearly growth for the first time since May last year. Growing sales of more efficient vehicles is surely also contributing to keep demand levels subdued.